Page 12 - CEE Tax Guide 2025

Bosnia and Herzegovina
Forvis Mazars Consulting d.o.o.
Bulevar Meše Selimovića 17a,
71000 Sarajevo,
Bosnia and Herzegovina
Phone: (00387) 62 339 680
www.forvismazars.com/ba/bs
Corporate taxes and other direct taxes
It is important to note that Bosnia and Herzegovina
(BiH) is divided into three tax jurisdictions: the
Federation of BiH (FBiH), the Republika Srpska (RS)
and Brčko District (BD). For simplicity’s sake, we will
focus on the RS and FBiH.
CIT is set at a flat rate of 10%. A company in the
FBiH/RS is considered resident if it is registered
as a legal entity in the relevant jurisdiction, or in case
its activities in BiH, qualifies as PE. Losses can
be carried forward for up to 5 years in all tax
jurisdictions. Loss carryback is not permitted.
Transfer pricing in Bosnia and Herzegovina
Arm’s length principle Since 1998
Documentation liability Necessary. Prescribed
in the transfer pricing
documentation.
APA No – CIT liability by 50% of the investment in each
Country-by-Country Annual consolidated
liability group ≥ EUR 750 million
(previous year).
Master file-local file Deadline
(OECD BEPS 13) 45 FBiH/30 RS days from
applicable the request made by the
tax administration.
Penalty
lack of documentation EUR 1,524—50,867
for legal and EUR
1,278—EUR 7,669 for
responsible person.
tax shortage No – Moreover, the parent company and its subsidiaries
Related parties Direct or indirect
25% control /a common
(25%) < managing director/
significant influence.
Safe harbors FBiH-Rate for support
services is 5%
(administration, legal
services, HR, etc.).
Level of attention paid 7/10
by Tax Authority
Central and Eastern European tax guide 2025
There are no special limitations in the case
of M&A transactions. In FBiH, interest expenses
taken from related parties are tax deductible
in a debt/equity ratio of 4:1 (thin cap rule). In the RS,
interest expenses are not recognized for the amount
of net interest expenses that exceed 30% of the tax
base (without financial items). In the RS, R&D costs
are recognized in line with IAS. In the FBiH and BD,
R&D costs are recognized.
Profit on dividends is not included in the calculation
of the tax base. In the FBiH, taxpayers who invest
their own resources in production equipment
to a value exceeding 50% of the profit for the current
tax period see a reduction in corporate income
tax liabilities for 30% of the amount for the year
of the investment.
Any taxpayer who invests more than 20 million
in BAM (EUR 10.2 million) over five consecutive
years (minimum investment in the first year is equal
to 4 million BAM (EUR 2.04 million) reduces its
of the 5 years.
The withholding tax rate for dividends amounts
to 5% in the FBiH unless a DTT applies (currently,
there are around 38 active DTT’s). Interests,
royalties, and technical fees paid by a BiH company
to a foreign company are subject to withholdings
at a rate of 10%. In the RS, there is a flat-rate
withholding tax (10%) on all payments to foreign
legal persons in which there is an obligation to pay
withholding tax. The group taxation concept
is allowed in the BiH for a group of resident
companies, with a minimum of 90% (FBiH).
constitute a group of companies if they have
direct or indirect control over 50% or more of the
shares or stakes.
In cases of real estate acquisition in the FBiH,
the transfer is taxable at the canton level. In the
RS, there is no transfer tax, but the owner of the
real estate has to pay property tax of up to 0.20%
of the market value. (Decreased rules for
production RE apply).
Forvis Mazars 12